Conservative Party leadership contender Liz Truss
(Picture: PA Wire)Liz Truss put herself forward on Thursday as the Tory who can save Britain from recession by “bulldozing” through bold measures including major tax cuts and reforms to boost economic growth.
Laying out her vision for the UK, the Foreign Secretary argued that “business as usual” policies would leave the country in the economic doldrums and vowed to ditch “Treasury orthodoxy” which she said had resisted much-needed change.
She denied that her proposed tax cuts of around £30 billion would worsen the cost-of-living crisis by fuelling inflation, as warned by many economists.
The former Chief Secretary to the Treasury told BBC Radio 4’s Today programme: “What is the gamble is what we are doing at the moment because currently the United Kingdom is projected to head for a recession.
“So we need to do something different in order to get growth going, in order to put money into people’s pockets.
“People are struggling with the cost-of-living. It’s wrong to be increasing their taxes at the time.”
The day after getting on the next Tory leader shortlist of two with Rishi Sunak to be put to party members over the summer, Ms Truss stressed she was “impelled” to push for change, adding: “I’m pretty hard working, pretty direct and I will bulldoze through frankly the things that need to get done.”
She is proposing immediate tax cuts including reversing the rise in National Insurance contributions, which she said opposed in Cabinet, as well as ditching the planned increase in Corporation Tax from 19 per cent to 25 per cent, and cutting £153 off energy bills by lifting the green energy levy.
But her proposals have been dismissed as “fairy tale” economics by former Chancellor Mr Sunak who has warned that they would further increase Britain’s debt mountain and that future generations would be left to pay it off over coming decades.
Ms Truss’ arguments may not be helped by the latest public finance figures which showed interest payments on the UK’s debt helped push up borrowing last month.
The Office for National Statistics said Government borrowing hit £22.9 billion, the second highest June since records began in 1993, and £4.1 billion more than the same month a year ago.
Central government debt interest payable was £19.4 billion in June 2022, the highest since monthly records began in April 1997.
Mr Sunak is proposing taming inflation which has hit a new 40-year record high of 9.4 per cent, while focusing on economic growth, before tax cuts ahead of the next General Election, expected in 2024.
He is believed to be trailing behind Ms Truss, who is seen to be modelling herself on Margaret Thatcher, among party members.
Seeking to defend his Tory credentials, he told The Telegraph: “I believe in hard work, family and integrity. I am running as a Thatcherite, and I will govern as a Thatcherite. I believe in national sovereignty. Strong borders - tight control of both legal and illegal immigration.”
Ms Truss, though, argues that tax cuts would revive the economy to improve the public finances.
She is also facing questions over her political journey from speaking at a Liberal Democrat conference in 1994, where she highlighted calls to abolish the Monarchy, to backing Remain in the Brexit referendum, to now being the candidate of the Right in the race to succeed Boris Johnson.
“I was wrong and I’m prepared to admit I was wrong,” she said of Brexit, despite several reports now showing that Britain’s economy has been harmed by quitting the European Union and the political turmoil over Northern Ireland.
“Some of the portents of doom did not happen.
“Instead, we have actually unleashed new opportunities.”
She highlighted trade deals with countries such as Australia, though many economists say they will not make up for the economic harm caused by new trade barriers with the European Union.
On her political journey, she stressed that she did not come from what is often seen as a traditional Tory background, having grown up in Yorkshire and gone to a comprehensive school.
“I have developed my political views and ideas,” she added.
